FTC Report: Shopping Apps Lack Sufficient Disclosures

The Federal Trade Commission has advice for mobile shopping app users: You better shop around. A new report advises consumers to pay attention to privacy and use policies and suggests avoiding those with vague disclosures or none at all.

The report, "What's the Deal? An FTC Study on Mobile Shopping Apps," found that many mobile shopping apps lack sufficient consumer disclosures and recommends that apps should 1) tell consumers what their rights and liability limits are when it comes to unauthorized, fraudulent or erroneous purchases, 2) more clearly describe how they collect, share and use consumer data, and 3) ensure that data security promises are backed up with sound practices.

The FTC cannot force companies to make app best practice promises to consumers, but it can take action if those promises, once made are not kept, since that would be false and deceptive conduct under the FTC's purview.

The report surveyed 121 different shopping apps across Google Play and Apple App Stores and concluded that the apps "frequently" failed to provide consumers with clear information on dispute resolution and liability

The majority of the apps did have privacy policies that disclosed that the apps collected a wide array of info, including Social Security numbers, but that those disclosures often used vague language that reserved broad collection and use rights

In addition to calling on companies to be more transparent, the FTC urged consumers to check those policies and actually evaluate them in choosing apps, which could include limiting dollar amount in stored accounts or altogether avoiding shopping apps that do not provide sufficient info to make an informed choice.

The vote on the report was 5-0, and is part of the FTC's effort to encourage more mobile app transparency and privacy.